People who live in Brazil simply can't realize why some people abroad take FGV surveys seriously. It's beyond any imagination for one to be considered "middle class" if he or she has to survive with 1.064 reais a month. And to be classified as "above middle class" just for having a monthly income of 4.591 reais is even more laughable.

As an Economist I feel sad to see people looking at shallow factors while our unequal, bureaucratic, clientelist and corrupt society remains the same. The main function of a laic government is create and enforce the institution of property right. The World bank in 2004 started a series of research named doing business (www.doingbusiness.org), around the same time, MGI, Mc Kinsey Global Institute released a paper examining Brazil's informal economy and the damages provoqued by it to our society. In Economic development, the Institutionalists (i.e Douglas North, Nobel 1993) and Mechanism Design Theorists (Leonid Horwickz, Nobel 2007) propose among other things, that a society is created and works with an institutional framework behind its interactions. Brazil is the second most unequal country in the World, one of the worst to do business and has one of the most complicated and draining tax systems. If we, Brazilians, want to change our country, we must stop accepting exeptions, accepting disrespect and imposing law and order. We can't go out drinving our bullet proof cars in Rio, seeing 800 favelas and still pay the IPTU, (property taxes)... In Argentina, a Honda Civic, made in Brazil costs half what it costs here, for us. Informality is 39 percent of our economy, while India is around 18, it is huge, that is a signal that incentives are wrong, the tax system is bad and we must change! The government doesn't want to impose real change in the tax system because that would be the real distribution of income. The government doesn't make it easy for people to be entrepreneurs, imposing too many regulations and costs, forcing people to be informals or offer themselves as cheap labor. Instead, they distribute a card with some cash, for poor people to buy food. In reality I get sick with wrong mechanisms provoquing bad outcomes and everyone around proposing shallow, short term, second best solutions. Brazil must become a serious country, if it is a middle class country, this middle class must make it self heard... source: Institutional Change in Economic History, Douglas C. North. Mechanism Design Theory, Leonid Hurwicz. El otro Sendero, Hernando de Soto. www.doingbusiness.org/documents/doing_business_in_brazil_portuguese.pdf , http://www.mckinsey.com/mgi/publications/informaleconomy.asp

perguntador, I would add to your comment that a lot of people who complain bitterly that Brazil is not more like Britain or Finland, would actually hate it if it were. They would not be able to afford maids, nor Brazilian style barbacues every weekend, and would have to pay more taxes.

Marcelo Neri, the FGV man this article quotes, wrote some weeks ago a very interesting opinion piece in Valor, the business newspaper (the website is for subscribers only). He has been looking seriously at these issues for some time now. His findings should not be dismissed lightly. He says that some of the criticism his work has received shows more about Brazil's upper middle classes Miami-like spending habits than a willingness to understand the way Brazil has been changing. It should be obvious that the criteria for being middle-class in Brazil cannot be the same as those for Britain or Finland. Right now, it means, among other things, a formal job, access to credit and some goods, and a few years more of education, as The Economist notes.Our income level, of course, is still much lower than in rich countries, or even than Chile's, to compare with a neighbour. But for the first time, more than half of Brazil's population is not desperately poor and hopelessly uneducated. And the trend is for the better, as the Gini chart in this article shows.It is a milestone. If sustained, this trend will change Brazil forever. You don't have to be a Lula supporter to see this. The title of The Economist's article - "Half the nation, a hundred million citizens strong" - clearly sees the importance of what's happening. Unfortunately, the same cannot be said of so many Brazilian posters in this forum (there are exceptions, of course). Our political debate tends to the petty, mean & strident, and it shows here. Maybe it is also part of the learning curve, who knows? I hope so.

tatiana hoffmann,
Do you remember that, a couple of years ago, IGBE released some data (not good for the government) and the president became angry shouting:
- For now on, any IBGE data, before publication, will have to be shown to me!

No doubt Brazil is growing and I think it is a relatively solid growth. There are two basic reasons for that. Currency stability and commodities prices. And of course, the brilliant work the brazilian businessmen and workers are doing, even with so many obstacles. A short walk on most of the big cities and it is so easy to see the great quantity of new enterprises.

The price of the commodities can fall anytime and Brazil would feel it, so the international commerce is still an important factor to the country.

But the currency stability has created good opportunities for the domestic market, specially for classes C and D, who did not have an efficient protection against inflation. And now they can plan, using credit, and good credit is a nice thing for any economy.

I don�t agree with the criteria used to define what is middle class and I don�t think is so important. Obviously, social mobility is expected and that could be much better if we had good leaders and good politicians.

About this, we have a pathetic president and some ridiculous politicians. These men have not reduced bureaucracy, corruption, public services inefficiency, the size of the state and the centralization of money and power.
This is absolutely related with the health of the economy. It could be much better...

And as tatiana hoffmann posted, they still don�t have the minimum notion of what is priority.

We actually increased the rich or middle class? They will be behind the problems of lack of financial resources? Perhaps yes, perhaps not. Currently, a great possibility of change is the discovery of oil supplies from pre-salt that can be good for Brazil, and we hope so. For example, huge reserves of oil may be the source of resources that give life to structuring investments that the country needs. But we should care because managed so wrong, that reserve can bring more problems than solutions. In recent days, we can see clearly that the problems of underdevelopment, however, are not usually of ignorance, but the lack of political and social conditions to apply knowledge already established for solution of social problems and economic importance. For this many decisions that must be taken, either on management model, or financing, and even on the breakdown of the results, both among enterprises and state, as between units of the Brazilian Federation.

Mr. Bergch(AND OTHERS BRAZILIANS COMMENTATORS)
A perfect English? With a perfect English Grammar?
Well, there is no such thing. I know for a fact that some commentator among us, made some unacceptable remarks about "Brazilian English" used in this forum.
Actually calling a “PIG ENGLISH.”( I will not translate THE REST OF THEIR COMMENTS).
To prove it, I became a member to show that both of then English are absolutely ordinary, like the rest, with just a few exceptions.
. The hole idea about the financial Brazilian situation is to matter, and not their poor or rich English.
Lord FY was banned from this forum to bring this up and it’s OK. I came back just to tell you:
SHAME ON BOTH OF YOU.
Stop going into Brazilian forums and criticize these nationals (Brazilian).
They are not so CAPABLE as you are. (Kikiki)
Why don’t you both make some criticism right here? Why going into some other forum to do such dirty gossip?
Get a hold of your selves. Be nice..Stay here and bright everybody else with your expertise in Brazilian Economy, Mr. Biologist.
Yes, report me to the Economist administrator and then probably will stop me again
As long the Brazilians here knows you are.
I am abandoning this forum. Don’t bother reporting me.

Folks, I have made, in another thread, a comment referring to the poor English of a commenter who was consistently disrupting everybody's conversation. My intention was to stop those disruptions, which were annoying to everybody, that's all. Of course, Lord took this out of context to feel himself important. I probably should not have made that comment, and I apologize for those who felt offended. Now, let's stop with this grammar/English thing and move on.

Macunaima and it´s contratictions reflect our people and ourselves. Therefore, I come back to say something that came out to my mind in my sleep and that is possibly connected to the facts: F.Y. means "vai te f...." in the best translaction of the english words...he,he,he...and the figure might come from the south of Iguaçu. Bye,bye.

Thiago, let's try not to focus on people but on ideas. Yes, all countries in the world have their problems but that does not justify ours. If we are idealistic people then we should try to bring Brazil to the highest standards known to man. Brazil is far from that and what lots of people are celebrating as a pinnacle never before reached, is no more then a mirage. Numbers manipulated to champion the current administration, specially it's head. You must also understand that high economic activity doesn't always bring, or mean, social development as a result because money is expendable, knowledge is not. And here is the "x" of the equation. Brazilian people still have the wrong priorities in life and don't seem to be willing to change and I don't see an effort from the current administration to change that. As someone said here, "Brazil is fun!". Yes, Brazil is fun but at what cost? In a high-tech world Brazil's main source of income is extraction and sale of raw materials and our financial industries is built upon the State’s need to attract capital to finance itself, instead of borrowing from banks, as it was done before. In an age of knowledge, Brazil is a dumb country, no offence meant. Just for you to have an idea: there is a project in France called ITER, is the world`s first nuclear fusion reactor and is been built by the EU, US, Russia, Japan, India and South Korea. What is Brazil doing about it? Trying to sale alcohol from sugar cane? So do you think Brazil is better today then you have ever seem before? God! You must be young. I’m not criticizing Brazil as a country or insulting it’s people as everything have a solution over time, but I am surely criticizing the current administration. By the way, I’m in Hounslow.

I joked about Lord's grammar and my last sentence had a nominal concordance problem... "... Who is the developed world to say no?"or"...Who are the developed contries to say no?"Anyways, I am a commoner.. never tried to be a Lord.. not even in this debate forum...

Lord F Y hauhauahua what a name...By the way, I caught many grammar mistakes amongst your comments dear... For a so called Lord, you have to study rather more Grammar to not pass as a commoner...In addition, I really find Brazil better now than ever.. My parameter of comparison is my life. Never throughout my live i have ever seen Brazil as prosperous as today. there are still many problems, nevertheless, which developed (or not) country does not have any? Europe's economy is sinking rapidly. America's too.. Japan is stagnated for years and just lost it's PM in a political turbulence. China has many social problems... Russia is rotten with corruption. Not to mention the social problems also in Europe and America.My humble opinion is that Brazil could self-proclaim developed and industrialized if it it was its wish. Who are the "developed" world to say no?(I am a law student residing in London at the moment)

Lord F YI don’t know what you are talking about. Do you have any proof of your allegations?If you have, it will be of a tremendous help to Brazil, if you expose the crime at this forum, and go ahead and press charges at the Brazilian justice system. I wish you can prove it, otherwise you’ll taken just as another whiner, who is not a member of the party at the power, and just want it to collapse, so you, and your party cohorts can take the spoils. I hope I am wrong, but you sound like most of the Brazilian economic elite, who does not accept Lula as a president because he is came from the very bottom of the society that has been exploited for centuries. Now, some of you are outraged by being governed by the servants.Life is a circle, is not that? That is why I love democracy.

Enough w/ the non sense, Brazil isn't a socialist country in any way, shape or form. Corrupt, yes, crazy in many ways, again hell yes but fun too. Now, think about the fact that they found all that oil in an INDUSTRIALIZED country, I am not saying developed, just industrialized. I hope we will use the oil money wisely and not squander it like Hugo Chavez is doing in Venezuela. I am kind of excited about the creation of a ship building industry almost from scratch to serve the oil industry and other means, the building of railroads, etc... Also, lets not forget we're talking about a country which has dramatically increased it's trade w/ the rest of the world so it's certainly not a closed economy as many have said in this forum and Brazilian companies are investing all over the world too, buying up foreign companies and building factories, etc...

I am Brazilian, live in the US and travel to Brazil regularly. I can tell all of you 1st hand: 1) Things are actually getting better in Brazil after all 2)Yes, it's still a crime ridden country but I've been lucky in the past 20 years not once was I robbed there but rather I was a victim of crime in Newark, NJ 3) I have several nephews and nieces going or have gone to Universities there, something totally out of reach for someone of my generation born in the 70's or before 4) A lot of people can now afford cosmetic dentistry, (mostly braces) even the domestic workers so Brazilians in a funny way are becoming much like North Americans, rsrsrs with the expanded waistline many got from the improved standard of living and straight teeth. 5) My brother who only earns about USD$450.00 a month was able to buy a house financed through the government housing authority on a fixed interest rate of about 10% APR for 20 years w/ 10% down payment. 6)Things are getting very tough here in the US almost to the point one doesn't know if it's better here or in Brazil 7)We had to take my son to the doctor in Brasilia, so we went to a public health clinic and he was taken care of very well, we thought but later on in the interior of Minas Gerais state my wife was advised to take him to a private doctor as the health clinic was, they said (only for poor people) and not equipped properly. 8)I have to vote in order to renew my passport in Brazil but never do, just pay a fine of about USD$2.00 and it's Ok